Taiwan Semiconductor Manufac-turing Co (TSMC, 台積電), the world's biggest supplier of made-to-order chips, expects chip prices to rebound in this quarter after some five quarters of stagnation, boosted primarily by strong demand for consumer electronics, company chairman Morris Chang (張忠謀) said yesterday.
With strong demand for DVD players and set-top boxes, which convert digital cable signals for analog TVs, Chang said average selling prices should rise by 3 percent to 5 percent in the second quarter.
Forecasts predict that demand will exceed supply, Chang told investors yesterday.
At capacity
The chipmaker's facilities will be fully utilized this quarter, he said. The company's capital spending will remain unchanged at US$2 billion for this year, but there is room to grow, Chang said.
During the same period, he said, wafer shipments will grow by 10 percent after a 4-percent jump in the first quarter.
As a result, TSMC's gross margin will climb by about 5 percent to exceed 45 percent in the three months to June 30.
The company said earlier this week that first-quarter earnings quadrupled to NT$18.79 billion, or NT$0.93 a share, from a year ago, on higher revenue of NT$57.51 billion.
Given the strong results for the quarter, TSMC chief financial executive Lora Ho (
For next year, Chang said it was too early to see a cyclical downturn as it usually takes five to six years to go from peak to trough.
He said he still believes the global semiconductor industry will grow at a 10-percent annual rate from now to 2007 and that the foundry business will outpace that growth.
Revenue growth
According to an estimate by Chris Hsieh (
"It's a reasonable growth rate, based on Chang's guidance," Hsieh said.
But the growth pace will be slightly slower than that of TSMC's smaller rival United Microelectronics Corp (UMC,
The world's No.2 contract chipmaker is expected to record 18 percent growth, said Hsieh, who raised his projection from 15 percent.
Commenting on TSMC's success in winning approval from the government to set up a less advanced plant in China, Hsieh gave his thumbs-up.
"It's big progress TSMC has made to tap in to China's semiconductor market, though the Chinese fab will not start to contribute much for at least one to two years," Hsieh said.
Despite strong performance in the first quarter, TSMC shares fell 4.96 percent to NT$57.5 yesterday on the TAIEX, as investors showed concern over China's plan to cool down its overheating economy.
BUSINESS UPDATE: The iPhone assembler said operations outlook is expected to show quarter-on-quarter and year-on-year growth for the second quarter Hon Hai Precision Industry Co (鴻海精密) yesterday reported strong growth in sales last month, potentially raising expectations for iPhone sales while artificial intelligence (AI)-related business booms. The company, which assembles the majority of Apple Inc’s smartphones, reported a 19.03 percent rise in monthly sales to NT$510.9 billion (US$15.78 billion), from NT$429.22 billion in the same period last year. On a monthly basis, sales rose 14.16 percent, it said. The company in a statement said that last month’s revenue was a record-breaking April performance. Hon Hai, known also as Foxconn Technology Group (富士康科技集團), assembles most iPhones, but the company is diversifying its business to
ARTIFICIAL INTELLIGENCE: The chipmaker last month raised its capital spending by 28 percent for this year to NT$32 billion from a previous estimate of NT$25 billion Contract chipmaker Powerchip Semiconductor Manufacturing Corp (力積電子) yesterday launched a new 12-inch fab, tapping into advanced chip-on-wafer-on-substrate (CoWoS) packaging technology to support rising demand for artificial intelligence (AI) devices. Powerchip is to offer interposers, one of three parts in CoWoS packaging technology, with shipments scheduled for the second half of this year, Powerchip chairman Frank Huang (黃崇仁) told reporters on the sidelines of a fab inauguration ceremony in the Tongluo Science Park (銅鑼科學園區) in Miaoli County yesterday. “We are working with customers to supply CoWoS-related business, utilizing part of this new fab’s capacity,” Huang said, adding that Powerchip intended to bridge
Qualcomm Inc, the world’s biggest seller of smartphone processors, gave an upbeat forecast for sales and profit in the current period, suggesting demand for handsets is increasing after a two-year slump. Revenue in the three months ended in June will be US$8.8 billion to US$9.6 billion, the company said in a statement Wednesday. Excluding certain items, earnings will be US$2.15 to US$2.35 a share. Analysts had projected sales of US$9.08 billion and earnings of US$2.16 a share. The outlook signals that the smartphone market has begun to bounce back, tracking with Qualcomm’s forecast that demand would gradually recover this year. The San
Clambering hand-over-hand, sweat dripping into his eyes, a durian laborer expertly slices a cumbersome fruit from a tree before tossing it down to land with a soft thump in his colleague’s waiting arms about 15m below. Among Thailand’s most famous and lucrative exports, the pungent “king of fruits” is as distinctive in its smell as its spiky green-brown carapace, and has been farmed in the kingdom for hundreds of years. However, a vicious heat wave engulfing Southeast Asia has resulted in smaller yields and spiraling costs, with growers and sellers increasingly panicked as global warming damages the industry. “This year is a crisis,”